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image of a post office building | accountingweb | Not all subpostmasters’ compensation will be tax-free
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Not all Horizon compensation will be tax free

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The differing tax implications for the three forms of subpostmasters’ compensation mean that recipients must be sure they fully understand their situation before completing tax returns.

2nd Apr 2024
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There are currently three forms of compensation being awarded to subpostmasters following the Horizon scandal and each will have different tax implications. It is important for the recipients to understand these and include the right amounts on their self assessment (SA) tax returns.

Group litigation order and overturned convictions schemes

The group litigation order (GLO) scheme is an ex gratia claims-based scheme for subpostmasters who were part of the action Alan Bates and Others vs Post Office Ltd. Subpostmasters who were convicted of a Horizon-related criminal offence are not eligible to apply for compensation under the GLO.

In March 2024 the government legislated to automatically quash convictions relating to the Horizon scandal. Those subpostmasters can apply for compensation under the overturned convictions (OC) compensation scheme.

Because a significant proportion of the GLO payouts were swallowed up by legal fees, and to ensure fairness between compensation schemes, the government has offered an optional fixed sum settlement of £75,000 (inclusive of interest) to all eligible claimants in the GLO scheme. This will be paid net of any payouts already received.

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Replies (9)

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By FactChecker
02nd Apr 2024 12:36

Good resume of the knotted-spaghetti of these schemes and their tax treatment.
I fear it provides an excellent insight into both the incomprehension and incompetence that are rife within government depts.
As Ray put it "the piecemeal way in which they have made provision for tax" - of which this is by no means the only or worst example.

One suggestion re the article: would it not be a nice/useful touch to move the contact details for the support team to the *top* of the page (maybe in bold in a box) so that those with clients caught up in this feel there's somewhere to turn to before diving in to the rest of the detail?

Thanks (3)
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By Paul Crowley
02nd Apr 2024 13:57

Would this be better in the tax section?
Accounting software seems an odd choice.

Thanks (1)
Replying to Paul Crowley:
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By Homeworker
03rd Apr 2024 10:01

Paul Crowley wrote:

Would this be better in the tax section?
Accounting software seems an odd choice.


It already is?
Thanks (0)
Replying to Homeworker:
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By FactChecker
03rd Apr 2024 11:52

It initially appeared, yesterday, within the 'Accounting Software' section ... but has since been sensibly moved to here (after Paul's sensible suggestion).

Thanks (2)
Replying to Homeworker:
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By Paul Crowley
03rd Apr 2024 13:04

It is now, it was moved yesterday.

Thanks (0)
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By listerramjet
03rd Apr 2024 10:09

Just how incompetent is our government? Byzantine doesn’t do it justice! And another example of why the tax codes needs major simplification.

Thanks (2)
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By Ian McTernan CTA
03rd Apr 2024 11:37

Only civil servants can be this useless and stay in their jobs: clearly the whole compensation package from top to bottom should have been exempted from tax, which could have been done with all party support on a 5 minute bill in Parliament if the Treasury and the civil servants involved has an ounce of sense.

Or deemed to have been fully taxed when received, and exempted from reporting on a tax Return.

Never ceases to amaze me how complicated people want to make things.

Thanks (7)
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By JonD
03rd Apr 2024 18:48

If the PO authority and/or Fujitsu are found to have behaved criminally, hopefully that will colour the various elements of compensation in favour of the victims.

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Replying to JonD:
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By moneymanager
03rd Apr 2024 23:54

It might form as a model for all the 'Covid shot' compo when the truth becomes undeniable.

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